Saudi Arabia’s Arkad, ABB to form oil and gas JV

Saudi Arabia’s Arkad Engineering & Construction has signed a deal with Switzerland-based ABB, under which Arkad will acquire a majority stake in a new joint venture with the engineering group’s oil and gas engineering unit, agencies reported on Monday.

No further details were disclosed about the value of the deal.

Arkad, which is building a nation-wide pipeline network for Saudi Aramco, will gain a footprint in new markets like Algeria, Kuwait and the United Arab Emirates through the JV, said managing director Hani Abdelhadi.

For ABB, the acquisition comes as the Swiss company seeks to optimize its business portfolio, after its oil and gas businesses have been suffering from spending cuts amid lower oil prices.

“While our oil and gas EPC business will be transferred to the new JV, ABB will continue to serve the oil, gas and chemicals sector globally with its industry-leading automation, electrification and digitalization solutions,” said Peter Terwiesch, head of ABB’s Industrial Automation unit.

When the deal is finalized on Dec. 1, the joint venture will be rebranded as Arkad-ABB. It will begin operations on Jan. 1, 2018.